I have a strategy game with some 1024 trees with 6 billboard sides each. How do games like SimCity 5 handle transparency? Is alpha sorting the non-intersecting parts of each tree the only way to get rid of the problems of rendering transparent polys in the wrong order? Is this computationally expensive?

I'm not sure exactly what SimCity 5 does, but it's fairly common to disable alpha blending for trees and to just use alpha testing instead. That way, you don't have to do any distance sorting. If you were to do alpha-sorting, I believe you'd have to break up the billboards so that you have no intersecting pieces, and then you'd have to sort them on a polygon level using some sort of BSP tree, and then making a separate draw call for each polygon. Sounds expensive indeed. I suppose there might be some way to leverage depth peeling, but generally-speaking, doing a straight alpha test looks nice enough that a more-complicated solution is probably overkill.